UAW Retirees Receive GM “Christmas Bonus”

Even if the still-called the largest carmaker in the world General Motors repeatedly said it may run out of cash in early 2009, it still has to make a number of payments which, in the opinion of the company's representatives, may become impossible very soon. However, General Motors has just payed inflation bonuses to UAW retirees which, according to Autonews, could represent up to $700. Total costs may even surpass $200 million, the source added, due to the “73,000 surviving spouses receiving up to $455 each.”

Even though these payments were done using General Motors' pension funds, it does nothing more than to push the American carmaker close to bankruptcy unless the government approves the requested funding.

The year-end inflation adjustments are paid every year and are often called “Christmas bonuses” as money are often transferred just before Christmas. "Both the corporation and union are fully aware of the obligation," Dick Danjin, a GM retiree and ex-UAW representative, commented on the payments according to the aforementioned source.

General Motors announced in October that it may run out of cash in the first months of 2009, due to poor sales recorded since mid-2008 which were unable to cover overall costs of the company. Although it urged the United States officials to approve its loan request, the US Senate has put the Detroit 3 funding package on hold last week asking involved companies to comply with a set of rules that would guarantee they will remain in business. Basically, officials demanded GM, Ford and Chrysler to adjust their investment plan in order to include hybrid and environmentally-friendly engines which are said to represent the only way to revamp sales of these three major carmakers.